Asian Spot LNG Prices Remain at Six Month Low

Asian spot liquefied natural gas (LNG) prices remained at their lowest level in nearly six months on Friday as U.S. President Trump's "liberation day" tariffs pulled global markets down amid fears of a global recession.

The average LNG price for May delivery into north-east Asia LNG-AS remained unchanged from last week at $13.00 per million British thermal units (mmBtu), the lowest level since October 11, industry sources estimated.

"The risk of a global trade war and economic slowdown is pulling down global stock markets and fears of slower growth will impact energy prices too," said Alex Froley, senior LNG analyst at data intelligence firm ICIS.

Countries around the world threatened to retaliate against Trump's sweeping tariffs.

China announced additional tariffs of 34% on U.S. goods on Friday, the most serious escalation in a worsening trade war between Beijing and Washington.

"This is obviously not the best environment to get confronted by unseen import tariffs up to 34% for China, and 24-26% for India, South Korea and Japan," said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence.

"The widely shared opinion is that this will harm global trade and industrial production, reducing the demand for LNG even further," he said.

Earlier tariffs have already had an impact on U.S. LNG flows to China, with no cargoes arriving in China since February 6, ICIS's Froley said.

In Europe, Dutch and British gas prices plunged to their lowest level in over six months on Friday afternoon in line with sharp declines in oil and stock markets.

"Hedge funds with exposure to both commodities and equities sold gas heavily on Thursday to de-risk their portfolios, with oil and equities also falling," said Martin Senior, head of LNG pricing at commodities pricing agency Argus.

"Stop losses also kicked in when the TTF (Dutch title transfer facility) fell below certain price thresholds, exacerbating losses," he added.

The European Union, which is facing 20% tariffs, is preparing for countermeasures in response to Trump's duties, but analysts said Europe has no choice but to keep importing U.S. LNG, ruling out that retaliatory tariffs would cover the commodity.

An indirect effect of the tariffs was a weakening of the dollar against other currencies, meaning U.S. LNG cargoes are quickly becoming cheaper compared to other origins, increasing the incentive for Europe to buy more U.S. LNG to maximize storage filling in the coming months, Dozeman said.

S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $12.071/mmBtu on April 3, a $0.75/mmBtu discount to the May gas price at the Dutch TTF hub.

Argus assessed the price for May delivery at $12.07/mmBtu, while Spark Commodities assessed the April price at $12.044/mmBtu.

The U.S. arbitrage to north-east Asia via the Cape of Good Hope continues to incentivise U.S. cargoes to deliver to Europe, said Spark Commodities analyst Qasim Afghan.

In the LNG freight market, Atlantic rates dropped for the second week to $23,500/day on Friday, while Pacific rates rose to $26,750/day, Afghan added.